Avoid the common pitfalls involved with starting a business
I’ve been talking with a friend who is planning on starting a business and I remember how tough it can be to get up and rolling. Here is some advice I got that helped me through some of the common pitfalls in the process.
So a friend of mine was telling me that he’s decided to go out on his own. I remember, back in 2004 when I was a superintendent for D.R. Horton, I had a fantastic job. I was young at the time and young for a superintendent building houses and let’s just say that my salary at the time was substantial! Especially for somebody my age and at my point in my career.
I remember thinking to myself, in my youth ‘you know what, I can build custom houses. I’ve built over 200 houses here with a builder, I got this!’ And so, I got my general contractors license and I started building custom homes. And the wealth of what I didn’t know, and what I didn’t know was unbelievable! There were tons of things that happen behind the scenes. For example, when you are building for a builder and you’re a superintendent or when you’re employed by somebody else, they are handling:
- Site Work
- Ground Clearing
You’re there with a set of trades handed to you and you’re ready to build. It’s easy! But when you have to cultivate those trades yourself, when you have to create those contracts, when you have to learn the pros and the cons of who’s good and who’s bad and narrow down that trade database. There are some storms that you hit! There are some experiences that are going to cost you a little bit of money when you get there.
So a friend of mine has a fantastic job just like I did. When we were talking about him wanting to go out on his own and although I’m very encouraging of those who have ambition and drive, who push to do more, I have some words of advice. It’s the same advice I gave my friend in the same situation.
- Find a Mentor
- Be Prepared
Find a Mentor
For the first 2 years, after I left and started building houses on my own, I remember having some LONG DAYS! I had to find solutions to problems that other people had already experienced and already had the answers to. So I was reinventing the wheel on a day to day basis until I met my mentor. My mentor was named Kelly, he’s a custom home builder and he’s a fantastic individual. He started to teach me everything from how to interact with trades and show them respect to handle your bills and bookkeeping. Where to find good people and how to identify what is right vs what is wrong… The information I was able to gather from my mentor in a year’s amount of time propelled me 10 years forward! So my advice to my buddy was, ‘Find somebody who already does and is successful at what you want to do and find a way to serve them. Find a way to get in their good graces, to the point that they’ll give you the information that you need to progress.
The second thing was that I wasn’t prepared to go out on my own. I wasn’t prepared financially, I was thinking to myself ‘Man, I make a bunch of money now when I build a custom house I’ll make a bunch of money and everything is going to be great!’ What you don’t understand is the buildup to start a company. The buildup to get your infrastructure in place costs money and costs time. I wasn’t prepared for that. The financial struggles that ensued were almost severe, let’s just say that Raman noodles were a very common thing in our house for a couple of years! Which is fine, it’s expected to be part of the process. but the second piece of advice that we talked about was to make sure that you’re financially prepared. Make sure that you understand that just because you think that you’re ready to start something off the bat, it could be 6 months before you start to reap the benefits of what you’re doing. Be prepared for that risk.
Nothing Good in life happens without risk, so by all means, I’m a big advocate of going after the things that you want, but you need to be prepared. Have that 6 months of reserves set aside. Have the income, however much it is that you feel you need, taken care of first. Don’t leave a good job if you are not prepared to meet the needs of your day to day life.
Those are the two biggest that if I could have gone back and talked with the younger me when I decided to go out on my own, that I would have told myself. I’m very grateful that I did go out and start my own company, but I would have been more prepared, and I would have made sure that I had somebody in place that I could have asked advice from and bounced ideas off of. Because the hoops that I had to jump through were not necessary. With a little bit of information and a little bit of help, I would have been fine from the beginning.
So, if you’re thinking about doing it, those are my words of advice.
I’ll talk to you again soon.